Review of ownership in firms welcome
A policy shift that saw the Cabinet review the minimum threshold for local shareholding in the Information, Communication, and Technology (ICT) sector is a move in the right direction.
The bold move could help ease the cost of doing business and attract foreign investments in the technology sector. Considered an important sector in the country’s thrust towards the information technology revolution, the decision will come in handy in the expansion of the digital economy and transfer.
It reverses a 2021 policy in which Kenya raised the minimum local shareholding for ICT firms to encourage more domestic ownership in the rapidly growing industry. The changes are likely the reasons behind reduced competitiveness, limited job creation, lower innovation and overall slow progress in what is otherwise expanding digital world.
With the new policy review, the government is acknowledging the potential benefits of increased foreign investments in driving technology adoption, innovation and economic growth. By allowing greater foreign ownership in ICT companies, the government intends to attract tech firms and other international investors who can bring expertise, capital and cutting-edge technologies into the country.
If this comes to pass, this move will not only spur innovation and create job opportunities but will also go a long way towards enhancing the overall competitiveness of the local digital economy, which will help Kenya reap huge dividends from the industry.
Attracting foreign investments in the technology sector can lead to expanded access to digital services, bridge the digital divide, and empower businesses and individuals to fully participate in the digital economy.
Furthermore, the move further aims to promote inclusive growth and socioeconomic development across all sectors of the economy, leveraging telcos for growth in every important sector. The approval of this review signifies the government’s commitment to embracing the digital revolution and driving sustainable economic growth in the digital age.
Reaping fruits from this development will, however, depend on whether the government will continue to maintain a conducive environment for both local and international businesses to thrive.
By recognising the potential benefits of investing in ICT, the State must now strategically allocate resources to foster technological advancements and digital transformation.
That is the only way that the government can position the country as an attractive destination for foreign investments in technology, ultimately benefiting the digital economy and attaining the government’s vision to position Kenya as a regional technology hub.
